State revenues continue to fall short of expectations.

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The State Budget Agency reports total collections for January were $75 million below the forecast amount.  It also marks a 7% drop from total collections for the same period one year ago.

The biggest drops are in corporate income tax -- down 43% from January 2009.  Individual income tax also fell 14% from the previous year.

Governor Mitch Daniels says he is not ruling out future state employee layoffs as a way to counter the shortfall and stresses his proposed savings plan must be passed by the legislature to avoid exhausting the state's reserves.

He claims if the Indiana General Assembly fails to adopt the bills, the state will burn all $1.3 billion in reserves by the end of the two-year budget cycle.

Daniels points to one bright spot.  He says sales taxes have begun to catch up to the previous year.